Sunday, 11 November 2018

Keeping Your Credit Score High For Your Family's Sake

When we live alone, we tend to neglect financial planning. We tend to see our wages go into our bank accounts, direct debits take money needed to pay for bills straight out, and we simply spend the rest as we see necessary. If we are running a little short, we simply go without until we are next paid. However, when we have a family and take on responsibility over other’s well being, financial planning becomes that bit more important. We don’t want our little ones to have to struggle or go without at any point, and we need to make sure that we have extra money available to cover unexpected expenses (which tend to appear much more frequently when you have others’ needs to meet as well as your own). Budgeting, of course, is the first logical step that you should take in order to ensure that your money is spread logically and evenly throughout the month. However, another good way to give yourself a little financial security to lean back on is to ensure that you always have a good credit score. This will allow you to take out credit or loans as and when necessary. This money could tide you over, ensuring you can cover unexpected expenses without struggling. If you have a poor credit rating, you may be rejected from applications. But if your credit score is high, you are much more likely to be accepted quickly. So, here are a few steps that you can take in order to keep your credit score as high as possible!

What Is A Credit Score?

In order to improve your credit score, you first have to understand what a credit score is. Put simply, a credit score is a tool that professional lenders use to determine whether they should accept your application for credit or not. A high credit score shows that you have been responsible with previous lending - that you have stayed within your credit limits and made payments on time. A low credit score reflects irresponsible financial behaviour, such as missing payments, exceeding credit limits, or maintaining large debts for extended periods of time. You can check your current credit score at any time to see where you stand at the moment.

Starting Out

If you haven’t borrowed money before, you won’t have any credit history. However, this can prove detrimental. If you’ve never borrowed money, lenders have no evidence that you’ll pay them back (as they can’t determine your habits based on previous behaviour when borrowing) and they are consequently likely to reject your application. So how can you get started? Well, one option that you have is to take out a loan with a guarantor. This means that someone agrees to pay back your loan if you fail to. This means credit companies will get the money you have borrowed back regardless of whether you are responsible or not and are consequently more likely to accept your application. Buddy Loans, as a direct lender, provides some of the most competitive guarantor loans and is a good company to use as a beginner.

Keeping On the Right Path

Once you have been approved on a loan, it is important that you stay on the right path and prove yourself to be financially responsible. Make sure that you are familiar with the terms and conditions of your loan and that you stick to them. Note down dates when payments are due and make sure that the money is available in your bank account if it is coming out as a direct debit. If you have to make the payment yourself, make sure to pay it on time. If you have been given a credit limit, make sure that you do not exceed it at any point. This is all behaviour that will see your credit score rise.

Maintain Your High Score

Your score will be updated around once a month. So make sure to check in and see how your score changes on a monthly basis. This will help you to monitor your progress. If your score dips, you can see which areas you need to focus on improving upon and you should then take action to implement positive change!

Having a high credit score is important for everyone, but if you have dependents, it becomes increasingly important! So, follow the above steps and ensure that your credit score is constantly improving and is well maintained!

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